More and more, staffing companies are playing a key role in the American economy. Staffing firms such as Allegis, Adecco, Randstad, Kelly Service, and Manpower, are commonly known as temp agencies and provide temporary labor to a wide range of firms in all industries. According to a Department of Commerce report, temporary employment accounted for more than 2 percent of total U.S. employment in 2015.
Annual Totals for Staffing and Recruiting Industry
Source: American Staffing Association, Staffing Industry Analysts Inc., U.S. Department of Commerce
The staffing industry is now at an all-time high, with nearly 16 million Americans working as a temp or contractor for a staffing agency in 2015. These temporary placements have resulted in approximately $120 billion in revenue.
Recent Drop in Temp Employment and its Impact on the Staffing Industry
Temporary workers are a demographic that makes up the bread and butter of the U.S. staffing agency, and this is a demographic that has been diminishing in the current labor market. According to the Bureau of Labor Statistics (BLS), temporary-help employment has had a net decline of 41,800 jobs so far in 2016. Mark Marcon, a senior research analyst at Robert Baird, says that the drop in temporary workers is largely due to the cool-down in GDP growth, since employers tend to first turn to temp workers who are easy to add and subtract to an organization’s workforce.
“It’s kind of a weird brew in which some employers have pulled back on the number of employees they are bringing on staff, and there’s also a dynamic of pickiness over where some people are willing to work.” ~Mark Marcon, Senior Research Analyst at Robert Baird
This declining temp employment and lowered unemployment rate may lead to diminishing profits for staffing companies. For example, Robert Half, a leading staffing firm for finance and accounting positions in the U.S., saw its shares fall 18 percent in 2015 as the unemployment rate declined from 5.6% in December 2014 to 5 percent in December 2015.